Ian McConnell: We should all cheer Government Brexit vote defeats - they may help save UK from itself

THIS January always looked certain to be particularly gloomy for UK households and businesses alike - and so it is proving – but humiliating defeat for the Conservative Government this week on two key Brexit-related votes is definitely a bright spot.

The opening month of the year can often be grim for many, with the festive season over but the dark days of winter very much still here. However, with the Brexit date of March 29 less than three months away, a sense of unease seems particularly prevalent this January.

There has already been news from major retailers that consumers were cautious over the festive season and this is absolutely no surprise, given the squeeze in recent years on real household incomes and uncertainty over Brexit. And deep job cuts unveiled yesterday by Jaguar Land Rover and Ford will further weigh on household sentiment.

Fears of a no-deal Brexit, a scenario which the Bank of England has warned would likely usher in a recession deeper than that triggered by the global financial crisis more than a decade ago, will be at the forefront of many people’s minds. And an exit under Prime Minister Theresa May’s deal, which involves leaving the single market and ends free movement of people to and from other countries in the European Union, would also have a major detrimental impact on the UK’s prospects.

The clock is ticking very loudly now but the uncertainty over what the future will bring is as great as at any time since the ill-judged Brexit vote in June 2016.

Against this backdrop, it was most heartening indeed to see the UK Government defeated in its drive to stop an amendment to the Finance Bill aimed at making it more difficult for a no-deal exit to occur without Parliament’s say-so. This amendment is targeted at limiting the Government’s tax-raising powers in the event of a no-deal Brexit and, while there is debate over its practical effects, any significant barrier to a cliff-edge departure from the EU is most welcome.

The business community, while rightly concerned about the shambolic behaviour of the UK Government, should welcome Mrs May’s defeat in Tuesday night’s vote.

The more barriers to a no-deal Brexit, the better, particularly with the vote on the draft withdrawal agreement hammered out between the UK and EU and supported by Mrs May due to take place next Tuesday, and another defeat for the UK Government highly possible then. After all, why on earth would anyone, in these already grim economic times, choose to go down a path which brought recession?

The Government suffered another defeat on Wednesday, when MPs voted to force the Government to return to Parliament with a new plan on Brexit within three days if Mrs May’s EU withdrawal deal is rejected by MPs next week. What is particularly welcome about this vote, and the Finance Bill amendment, is the cross-party nature of support for these key, and rare, points of progress on Brexit. Both help open the door, albeit only slightly, to the UK being saved from itself by somehow avoiding Brexit altogether.

All the while, the UK economy stumbles along as it pays the price of the Brexit vote two-and-a-half years ago. Official productivity figures this week show annual growth of output per hour worked in the UK was, at 0.2 per cent in the third quarter, its weakest for two years. Dismal business investment over the period since the Brexit vote will have hit productivity.

Surveys published last week by the Chartered Institute of Procurement & Supply, with IHS Markit, signal the UK economy remained in lamentable shape in December.

Chris Williamson, chief business economist at IHS Markit, calculated that CIPS’s surveys of the UK services, construction and manufacturing sectors together pointed to UK growth of just 0.1% in the fourth quarter. This is already a serious enough situation, although Brexit, if it happens, will obviously make matters a whole lot worse.

However, the UK Government is by its actions fuelling, rather than alleviating, the public’s particularly acute sense of unease this January.

Was anyone reassured by the UK Government’s “live test” of plans to handle disruption at ports in the event of a disorderly Brexit? This involved paying for lorries, 89 of them, to be driven to a disused airfield in Kent. What on earth did the Government hope to achieve?

Elsewhere on the vehicular front, figures published this week by the Society of Motor Manufacturers and Traders showed new car registrations in the UK fell last year at the sharpest annual pace in the decade since the global financial crisis. Trade union Unite blamed the “Government’s botched handling of Brexit and continued economic uncertainty”.

A survey published this week by Ipsos MORI, conducted between December 7 and 20, shows 67% of Britons cited the EU, Europe and Brexit as one of the biggest issues for Britain. This is 21 percentage points higher than in January 2018 and should speak volumes to the UK Government as it plans what to do next. Unfortunately, there continues to be little, if any, sign the UK Government is listening.

Of those surveyed, 54% see the EU, Europe and Brexit as the most important issue facing the UK.

Even after this week’s defeats, Mrs May will not rule out a no-deal Brexit.

In the Ipsos MORI poll, 21% of people cite poverty and inequality as one of the biggest issues facing Britain. After nearly a decade of Tory austerity, this is no great surprise. This is the third-highest-ranked issue, with Ipsos MORI noting concern about poverty and inequality is at record levels in terms of its survey.

Ipsos MORI’s poll finds “concern about immigration remains at the lowest level recorded since 2002”.

Immigration is an important issue, in terms of the need for the UK to have enough of it to support its ageing population and boost its dismal growth. And Brexit threatens to starve the economy of the workers from other EU countries who make such a valuable contribution. Sadly, some noisy and xenophobic Brexiters take another view of why immigration is a key issue.

Mrs May likes to talk about the people having spoken. Perhaps if she looks at the Ipsos MORI poll she will realise that, with concerns high over Brexit and with worries over poverty and inequality at record levels, people throughout the UK will not thank her for damaging their living standards further by leaving the EU.

Comments & Moderation

Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.

Our Colleagues

Ipsoregulated

This website and associated newspapers adhere to the Independent Press Standards Organisation's Editors' Code of Practice. If you have a complaint about the editorial content which relates to inaccuracy or intrusion, then please contact the editor here. If you are dissatisfied with the response provided you can contact IPSO here